According to a Bank of Great Britain official, cash is disappearing from the UK economy, highlighting the need for a new form of digital currency supported by the government.
According to Deputy Central Bank Governor John Cunliffe, technology and the prevalence of credit and debit cards are diminishing the role of cash in transactions. According to him, in order to maintain the illusion of municipal funds in the economic system, the authorities will need to adapt.
“The central bank’s government funds are disappearing. There are areas in London where cash is not permitted, including for personal transactions.”
central bank digital currency-CBDC
The Bank of England, along with other central banks around the world, is looking into whether a “digital central bank currency” can stand in for cash and receive direct government support. This currency will be designed to work with online payment platforms and will evolve in tandem with technological advancements.
Foreign exchange methods were the primary method of transaction settlement in England until 2016, when they gave way to cards and other forms of payment, as shown in a discussion paper issued by the Bank of Great Britain in July. This trend has been exacerbated by the epidemic.
However, according to John Cunliffe’s texts, if people move their own deposits to CBDC, it will affect the banks, and the banks will need to adapt. People will use it in such a way that we will be unable to adapt.